Want 50Mbps Internet in your town? Threaten to roll out your own

ISPs may not act for years on local complaints about slow Internet—but when a …

Regional telco TDS Telecommunications last week issued a press release announcing a major milestone for the company: 50Mbps service over fiber optic cable to residents of Monticello, Minnesota. The Minneapolis suburb became one of the few non-FiOS communities in the country to experience full fiber-to-the-home deployment, and subscribers will all receive a free upgrade from 25Mbps service to the new 50Mbps tier.

Even better is the price, which starts at $49.95 a month for 50Mbps fiber service without the need to buy other services.

TDS is thrilled. "This is a huge first for TDS," said market manager Tom Ollig. "TDS is working incredibly hard to deliver the faster speeds customers want."

But the entire congratulatory press release glosses over a key fact: the reason that Monticello received a fiber network was the town's decision to install a municipal-owned fiber network to every home in town… spawning a set of TDS lawsuits that went all the way to the Minnesota Supreme Court, which ruled in favor of the town.

Screaming to be heard

The saga began in 2007, when the town passed a referendum approving the city-owned fiber network. The city says that it had approached TDS and was told that no such system would be installed in town in the near future, so it went ahead with its own plans.

After the referendum, the city was sued by the telco just before groundbreaking began. The suit didn't seem to have much of a chance under Minnesota law, and indeed judges at multiple levels ruled for Monticello. But in the meantime, TDS rolled into town with nine crews of its own and began installing—you guessed it—fiber to the home.

Monticello had just become one of the only US cities in which twin, parallel fiber networks were being built at the same time. Backers of the muni fiber plan were outraged; not only could TDS build a modern fiber network on a moment's notice when it wanted to do so, but the lawsuits prevented the city from doing much of its installation even as TDS moved ahead.

We spoke to TDS about the situation last year, and its director of legislative and public relations told us that TDS didn't act earlier because it didn't actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.

After delaying the town's deployment through lawsuits and rolling out fiber service of its own, TDS issued a statement in June 2009 in which it then called the whole rationale for the government project into question.

"In view of TDS' development of a robust broadband platform in Monticello during the past year, it is questionable whether or not the City's feasibility study supporting its own fiber project, which was premised on no broadband competitors and on which the revenue bond purchasers relied when they secured the bonds more than a year ago, is still accurate, and whether the city fiber project is feasible today."

Now, it has upped the ante by doubling everyone's speeds. The moves all seemed designed to keep the idea of a muni-owned fiber network from spreading, but they might well have the opposite effect; one takeaway from the entire saga is that trying to build a muni fiber network is an excellent way to "encourage" investment and innovation from regional or national companies that might not otherwise have your town's own best interests at heart.

Such stories aren't limited to Minnesota suburbs, either. Just last month Telephony Online ran a piece on how Cox cable prices had "dropped considerably" since Lafeyette, Louisiana lit up a fiber system of its own.

"Cox froze the cable rates in Lafayette, and they didn’t freeze the rates in other areas," said Terry Huval, director of the muni project. "We figured our citizens saved over $3 million in cable rates even before we could offer them service."

Competition

This shouldn't be a surprise, as it's really just a classic case of direct competition—something not seen often enough in the wired broadband market. Unfortunately, getting high-speed Internet to your town isn't always as simple as threatening to start a municipal network. Many times, incumbent providers simply file lawsuits while keeping speeds the same.

If your town is really unlucky, the incumbent will just head right to the state legislature, seeking to pass laws constraining the practice. That's what happened to Wilson, North Carolina, which runs a moderately famous 100Mbps system known as Greenlight (which just happens to be the fastest ISP in the entire state).

When Time Warner Cable (which still tops out at 10Mbps and no DOCSIS 3.0) was asked why it had not stepped up to meet the city's demand for faster access, a company rep told TechJournal South that it hadn't actually heard a citizen outcry over the issue—or it would have acted.

Wilson's Internet manager is having none of it. "We don’t want to run anyone out of business," he said, "but we also don’t want to take the leftover table scraps. If they had offered us what we were asking for, next generation good service, we would have happily stepped aside."

129 Reader Comments

I'm happy for the towns that have fast speeds at reasonable prices. Hopefully this will continue to spread. I'm not surprised that the incumbent providers are acting like assholes, that's par for the course when it comes to cable providers. As long as the results are good for the citizens, I look forward to more competition, whether from competing businesses or the municipalities themselves.

TDS didn't act earlier because it didn't actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.

Oh, that's rich. "They came to us and said they wanted it, but we didn't believe they really wanted it until they decided to build their own."

Any idea what equipment customers are using for their termination points -routers, modems, switches etc? I'm curious what those equipment costs are. This much speed I haven't seen in many consumer cost friendly devices yet.

We should get together groups in each state, train in how to install the fiber network and then got from one tiny town to the next, forcing ISPs to rush to stop or provide service. You only need to buy supplies for one town, since that'll be all you can muster at any one time under the machine gun of lawsuits.

I fail to understand what legal premise TDS had for suing the city in the first place. To presume that a city cannot offer services to its citizens strikes of arrogance and jackassery.

I'd really like to know why they stonewalled the city. I don't want the marketing drones answer, I want the boardroom answer. When these guys were sitting around drinking cognac and enjoying nice cigars what were they saying in regards to the city owned fiber network? "Fuck 'em" is what I think they said, but they can't actually say that in the press now can they?

A simple cure for this is whenever a lawsuit delays a government from installing a network, once that lawsuit is overturned, the party that sued for what turned out to be invalid reasons will have to pay the full cost of the extra effort to put the project back on the schedule it would have had if there were no delays.

Of course, the fact that they could get such an injunction, instead of the case simply being dismissed as soon as it was brought, means that the applicable law is not clear and explicit enough. This is the responsibility of legislators to correct, at all levels of government.

Originally posted by ivanolo:It seems like the invisible hand of the market needs a little encouragement... except for giving consumers the finger.

Where are all the Free Market drones sputtering about how the government ruins everything?

Nice straw-man argument you got there.

NOBODY would call the local Cable/ISP service anything close to a free market. And why do we NOT have free markets for Cable and ISP service ... because LOCAL GOVERNMENTS granted the incumbents exclusive rights to their jurisdiction.

In other words, the very LACK of competition for cable and ISP service STARTED with the local government in the first place.

I don't understand how TDS could roll in and run their own fiber network while the town had just started to do so. Doesn't the telecom have to get permission and cooperation with the town to run their lines? Easements, access to running shit under roads, whatever is involved in doing this?

Originally posted by Temetka:I fail to understand what legal premise TDS had for suing the city in the first place. To presume that a city cannot offer services to its citizens strikes of arrogance and jackassery.

The stupid FRANCHISE AGREEMENT that the local government HACKS signed with TDS in the first place.

If Monticello's local crooks boardmembers hadn't signed an exclusive franchise agreement to begin with, then TDS would have had the competition which would have provoked FiOS to the home.

Here in Detroit, we've got FiOS to the home all over the place... Hell, even on-the-edge of bankruptcy Flint, Michigan (which can't even afford to salt or even plow the roads more than once/month) which lost 80% of their manufacturing base has FiOS to the house.

Originally posted by Lone Shepherd:I don't understand how TDS could roll in and run their own fiber network while the town had just started to do so. Doesn't the telecom have to get permission and cooperation with the town to run their lines? Easements, access to running shit under roads, whatever is involved in doing this?

They ran it on the same poles/access-tunnels that their copper infrastructure already was.It's not like FiOS has anywhere near the bulk of the the copper needed to carry even 1/100th the capacity of the fiber.

It would cost towns with their own municipal power utilities less than 10 bucks a month to provide 1 GigE service via fiber to the block with cat 6e or wireless for the last 100 yards. The cost would be almost nothing if they were adding smart meters anyway.

More municipalities which can afford to set up fiber optic internet should do it. Competition will force these companies to act. These broadband companies rape you in terms of pricing and give you shitty speed and service. 55 bucks a month for crappy comcast cable which maxes out at around 8.0 mbps sucks. Luckily I have Kingsnet which is a school district set up 3 mbps internet. For ten bucks a month you can't beat the price. The only gay thing about this is some sites are blocked. But no problem for me with use of proxies or VPN clients.

Sometimes competition is a wonderful thing. I live in Stockholm, Sweden and in my area several companies offer fiber access. I have FiOS into my house. 100Mbps (symmetric) and IP-tv with basic channel selection for $25 per month. The IP-telephony is another $10 (using the same fiber).

Filling lawsuits is a short sighted practice. When the dust settles who in their right mind would want to be a customer at company that clearly want to scam you? The companies should compete fairly or just get of the market.

Originally posted by ivanolo:It seems like the invisible hand of the market needs a little encouragement... except for giving consumers the finger.

Where are all the Free Market drones sputtering about how the government ruins everything?

Nice straw-man argument you got there.

NOBODY would call the local Cable/ISP service anything close to a free market. And why do we NOT have free markets for Cable and ISP service ... because LOCAL GOVERNMENTS granted the incumbents exclusive rights to their jurisdiction.

In other words, the very LACK of competition for cable and ISP service STARTED with the local government in the first place.

Not quite. Yes, the franchise agreements are what prevents this. But it was the cable companies that came in and DEMANDED them in order to roll out to your podunk town.

Here in Detroit, we've got FiOS to the home all over the place... Hell, even on-the-edge of bankruptcy Flint, Michigan (which can't even afford to salt or even plow the roads more than once/month) which lost 80% of their manufacturing base has FiOS to the house.

Really? Where? As someone who lives in Metro Detroit, I can emphatically state there is zero FIOS in Michigan. While we have limited competition in our area (Comcast, Wide Open West, AT&T), broadband speeds are a joke compared to areas that have Fiber or FIOS.

Originally posted by claesh:Sometimes competition is a wonderful thing. I live in Stockholm, Sweden and in my area several companies offer fiber access. I have FiOS into my house. 100Mbps (symmetric) and IP-tv with basic channel selection for $25 per month. The IP-telephony is another $10 (using the same fiber).

I've heard of the wonderous internets in Scandinavia, but I've also heard of their rather brutal tax system and harsh winters.

In America where I used to live Cox ruled supreme and we got flaky and relatively slow internet. There was no competition and so rates went up almost every year. This was on top of TV rates increasing as well, and TV was a forced Bundle. Or, at least one of those, "we have it, but we're not advertising it and you've got to escalate to tier 1 support to get it" sort of things.

In the UK, I pay a lot less for comparable speeds over DSL. The top speeds aren't quite as fast as cable, but it's consistently up and I've never had to reboot my modem/router. £13 per month first 3 months free vs $55 per month + $20 (minimum) for the locals, government, and shopping channels (more if you want real cable TV). Granted, there is a "TV Tax" in the UK which amounts to paying >£200 per year for... the BBC, which I don't watch.

All that aside, competition is good, and these companies have had it good for far too long. Things have changed. They need to put up (FiOS) or GTFO of the way and let these people do it. This whole, "if they had told us, we would have put it in" is such crap, and suing to prevent them from putting it in is such a farce.

Originally posted by Banzai51:Really? Where? As someone who lives in Metro Detroit, I can emphatically state there is zero FIOS in Michigan. While we have limited competition in our area (Comcast, Wide Open West, AT&T), broadband speeds are a joke compared to areas that have Fiber or FIOS.

Yeah, I think Aaron Kulkis is confusing FiOS with something else. Definitely no FiOS or any other FTTH service in Metro Detroit.

Michalovce, Slovak Republic. Population 50,000. Three companies offer fibre up to 120 Mbps all over the town.

London, Britain. Population 10 million.Virgin pride themselves for offering 50Mbps in few very limited areas. Living 500 meters from Canary Wharf Banking center, 10Mbps ADSL is maximum I can get. You still need a 19th cenury technology to get online.

Originally posted by ivanolo:It seems like the invisible hand of the market needs a little encouragement... except for giving consumers the finger.

Where are all the Free Market drones sputtering about how the government ruins everything?

That's a myth that fat cats spread. It's corrupt politicians that ruin things. Not all politicians are corrupt.

"In other words, the very LACK of competition for cable and ISP service STARTED with the local government in the first place."

A lot of times there's no service at all. So a government will offer a company exclusive access to a community, since having one company is better than none at all, sometimes municipalities will do that.

Original article:We spoke to TDS about the situation last year, and its director of legislative and public relations told us that TDS didn't act earlier because it didn't actually know that people really, really wanted fiber; once the referendum was a success, the company moved quickly to give people what it now knew they wanted.

Yeah right. Name a person in the world who does not want Fibre broadband versus traditional copper one.

I live in a gods-forsaken developing country that had tanks on the streets just two decades ago, and I have 16Mbps non-capped connection - not very expensive either, elsewhere in the country for the same money you can get ~2Mbps so...

"When Time Warner Cable (which still tops out at 10Mbps and no DOCSIS 3.0) was asked why it had not stepped up to meet the city's demand for faster access, a company rep told TechJournal South that it hadn't actually heard a citizen outcry over the issue—or it would have acted."

Having been a past Time Warner customer myself (before they sold out to Comcast here), the reason they had not actually heard a citizen outcry is because of the way they do their service. If someone reports poor or slow speed they do everything possible to make it look like the problem is on the customers end first, or equipment failure. The customer ends up getting either fixed or worn down by the constant denials that speed is an issue by getting battered to death by the "up to" thing. Thus in their resolutions they list the issue as one of these and not that a speed issue actually exists. I had speed issues with Time Warner (along with several hundred others), when Comcast took over the problem was fixed in about 10 minutes by reprovisioning the same cable modem, at least for a while, where as a look at the Time Warner records shows their resolution to the issue (along with several hundred other customers) was basically "customer is receiving proper speeds" when that wasn't true at all.

They ran it on the same poles/access-tunnels that their copper infrastructure already was.It's not like FiOS has anywhere near the bulk of the the copper needed to carry even 1/100th the capacity of the fiber.

That's assuming that's how it was installed to begin with. I've seen both telco copper and fiber basically thrown into a deep trench and covered over.

quote:

55 bucks a month for crappy comcast cable which maxes out at around 8.0 mbps sucks.

Ah for the days when 56K "sucked". Now 2009 8 Mbps "sucks". Next it'll be 1Gbps "sucks". Here's a thumbs up to a public never satisfied.

This is most discouraging because if a municipality can do this, why didn't we just spend our stimulus package on a national system? We lived decades where AT&T had a monopoly, and it worked in the sense of getting phone service rolled out nationally. Why not go socialist with this? It's clear that the telecom oligopolies are turning the US into a digital backwater.

I pay $50/month for Verizon Fios. They advertise 15 mbps, but it maxes out at 9.5 mbps. I know what I'm expecting when I see that advertised speed, but it's still annoying that all the ISPs do that. Oh well, it's fast enough and at least I know that they aren't screwing with me like Comcast does. Always waiting for more competition.